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HomeMy WebLinkAbout09- Economic Development Agency ECOv4OMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCH,ACTION FROM: TIMOTHY C.STEINHAUS SUBJECT: ECONOMIC CONDITION Agency Administrator OF THE CITY WORKSHOP DATE: April 27, 1994 ------------------------------------------------------------------------------------------------------------------------------------ Svnopsis of Previous Commission/Council/Committee Action(s); On April 26, 1994, the Redevelopment Committee considered this matter and recommended approval to the Community Development Commission. ------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission establish a date and time certain for the conducting of the Economic Condition of the City workshop. TIM&HY STERqHAUS Agency Administrator --------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Timothy C. Steinhaus Phone: 5081 Project Area(s): All Ward(s): 1-7 Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A Budget Authority: N/A Commission/Councit Notes: TCS:lag:05-01-04.cdc COMMISSION MEETING AGENDA MEETING DATE: 05/0211994 Agenda Item Number: 9 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT ----------------------------------------------------------------------------------------------------------------- Economic Condition of the City Workshop The Chairperson of the Redevelopment Committee, Councilwoman Pope-Ludlam, has previously requested the Redevelopment Committee consider an Economic Condition of the City workshop in order to develop a strategic plan for overall economic development. The Committee considered this item on April 26, 1994 and received a written and oral presentation from Dr. John Husing, a local economist, regarding how such an economic development summit should be put together. After considerable discussion, the Committee recommended that the Community Development Commission hear a summary presentation of Mr. Husing's remarks and establish a date and time certain for the Community Development Commission to conduct such a workshop. Based upon the foregoing, staff recommends adoption of the form motion. TIMOTHY C.STEINHAUS,Agency Administrator Economic Development Agency ------------------------------------------------------------------------------------------------------------------ TCS:lag:05-01-04.cdc COMMISSION MEETING AGENDA MEETING DATE: 05/02/199944 Agenda Item Number: From O PHONE No. : 0 Apr. 19 1994 3:52PM P01 ECAP Mmmfe and political aml7e14 3142 cactus circle NiphlwH, M Qn4h.M-9 (7 A25-8952 FAX (9W)425-N9l2 'Pot Tim Steinhaus, Agency Administrator San Bernardino Economic Development Agency FROM: Sohn Hosing SUBJECT: Economic Summit context PATE: April 19, 1994 For several weeks I have boon immersed in discussions with economic leaders in dif£orcnt sootors of tho Inland Empire economy, both in and out of San Bernardino. My interest has boon in underotanding where we arc in tho businono cycle as well as what will be the emerging themes in terms of the noxt round of regional development. These discussions provide a good backdrop for developing a San Bernardino economic summit aimed establishing a strategic plan for the community. At your request, the following is a synopsis of my current thinking on this subject, GOALS An Economic Summit must be one part in a process designed to reach the following goals: 1. Elevate economic development to the top of the political agenda. 2. Highlight the location advantages and emerging positive trends in the San Bernardino economy. 3. Provide insight into the prospects and problems faced by firms doing business in San Bernardino. 4. Energize thinking in the real estate and development communities about how to tackle the problem of absentee ownership of San Bernardino's single family dwellings. 5. Begin the process of establishing a network Capable of giving small existing and start up businesses logical access to capital. 6. Provide a forum for discussion of the problems of Central City and Inland Center malls. V. Provide information needed for the development of a tightly focused San Bernardino economic development strategy including establishing redevelopment funding priorities. CONF$i2ENCE ELEMENTS 1. Onen(nq remarks from elected and staff officials establishing the conference's intent as part of a process elevating economic growth to the top of the political agenda and leading Lo a 1 Fran PHONE No. : 0 Rpr. 19 1994 3:53PM P02 tightly focused economic development strategy. It is vital that those involved in the Summit process be convinced that city officials truly wish to learn from them. 2. Revorts from 5 gr uus of profosaionals who aro in close contact with principala in a wide range of vectors. Between them these groups should be aware of the major financial, regulatory and business problems and prospects facing their clionta. They should also be aware of the current state of the economy and embryonic trends beginning to affect its sectors. A. Civil Engineers Any firm considering adding apace, be they expanding or moving to the area, must make contact with a handful of civil engineering firms. They spend hours with client's discussing their expansion plans and space needs, plus interacting with regulators. They are thus particularly aware of sectors with future job growth potential. B. Business Attorneys There are a small number of San Bernardino attorneys specializing in aiding business clients. 'Their exposure allows them a unique understanding at the business growth, financing, regulatory, management competency, and innovation issues affecting the region. C. Commercial Realtors /^ whether firma want to move to the Inland Empire, or ti... remain and increase/decrease their apace use, they are in contact with commercial real estate brokers. The latter are thus in a unique position to spot the kinds of firms trying to come to the area and the local sectors which are expanding or contracting- In trying to put deals together, they are well aware of the location, financing and regulatory issues their client's face. D. Certified public Accountants In handling the books of the business community, the accounting profession knows which sectors are becoming more profitable; which are becoming less so. In assisting client' s with pro formas, they know needs capital, what kinds of problems they are having in getting it, and what futures they are projecting to justify it. E. Local Major Developers Residential and non-residential developers have been a driving force in the Inland Rmpire economy since 1980. Non-residential developers are aware of the prospects for their own industry as well as the sectors for whom they may be building. Residential builders can provide insight into the current state of the residential 2 From O PHUE No. : 0 Rpr.19 1994 3:54PM P03 construction cycle and its long term local prospects. Both can offer commentary on how the regulatory process affects their success. 3. Economic Report on the status of the Inland Empire economy, the location advantages of the City of San Bernardino and the role it currently plays within the Inland Empire context. 4. Education Report from Tony Evans of Cal State and Stuart Bundy of EB community College Districts on the roles of their respective inntitutiona an economic catalysts and centers of innovation and training as has occurred in San Diego, 5. Financial discussion of how to fund new and small but growing Inland Empire firms in the coming recovery. Ponoion fundo, entrepreneurial capital groups, sophisticated financiers, and governmental entities have been thinking hard about this subject. The Community Reinvestment Act has also forced financial institutions to worry about it. The problem stems from the fact that conventional lenders have become risk averse by choice, necessity and in reaction to FIRREA and other regulatory pressures. They thus allow lower loan- to-value ratios and smaller working capital loans. They demand greater collateral and are less willing to fund start up or small but expanding businesses. California borrowers must thus find new ways to fund the equity in their projects & businesses plus decrease the risk of lending them money. This 1s true for both investment and working capital. The newer the firm, the greater the problem. No clear solution exists. The direction seems to include providing firms with clear entre to a rational network of community capital pools, private investors, pension funds and SBA and RDA guarantees. 6. Testimonials on what is Occurring within several portions of San Bernardino's economy (small manufacturing; professional services; geothermal; automobile transfer; conventions; Hos- pitality Lane) . Topics would include why new firms are locating in San Bernardino or staying here; emerging markets; attempts by other states to lure firms away; reasons for being in San Bernardino; costs of doing business in San Bernardino; difficulty of obtaining capital; regulatory problems. 7. Houg ng discussion aimed at facts, problems and strategies that can deal with the city's lose of single family home owners. Discussion would include outlining how the loss of single family home owners relatee to developing the balance of the economy. 8. ReWrt on Ran Bernardino international Airport from both the airport authority and the IVDA. The purpose is to give the public a better feeling of what the current status of the airport. [r 3 4 From © PHONE No. : e © Apr.19 1994 3:54PM PO4 9. a; ylbpa of the status of In]and Cc & Cen ray i y Mall . These centers are key bales tax generators for the city. They Lace significant competition. 90me logic musL be applied to an appropriate strategy for dealing with their competing interests. 10. A wrap On on what the conference has taught us. PREPARATION FOR BONIZT In preparation of the summit, numerouo community discussions would be held revolving around the elements outlined above. In each case, a respected host would be chosen to bring together thoughtful people to discuss the relevant questions. These conversaliunw would occur without staff present. The hosts would then organize a yxesentation from their discussions whioh would be made at the summit. At the summit, the Mayor, three Council Members (less than a quorum) , the City AdminisLralor and Economic Development Director and Con- ference Economist as staff would receive testimony and ask questions in a Congressional Hearing style atmosphere. Each presenter would be limited to 15 minutes plus 5 minutes for questions. It is vital that all of the players in the process approach it from the attitude that San Bernardino's economy faces serious challenges and the = mxnity must come together if prosperity is to ever be restored. AFTER THE SDH= Once the summit has been held, it will be necessary to pull the information learned together and organize it into a comprehensive economic development program for the city, including programmatic and funding priexiLiew. This would then be submitted to the policy makers for review, amendment and, at their choice, eventual adoption. Discussions would be held with both elected and staff officials in the process of developing such a plan. COST The full cost of putting this program together would be $12, 000 including contacting & organizing groups prior to the summit; conducting the summit; analyzing what was learned at the summit; preparing a comprehensive economic plan after the summit; and amending the economic plan based upon commentary from elected and aLaff officials. 4